The facts about chronic disease are heart-stopping: At least 85 cents of every health care dollar is spent on chronic conditions, according to the Centers for Disease Control.

The high cost of chronic care has a direct impact on self-funded employers, who pay directly for the medical costs of their employees. It’s also a driving factor in year-after-year premium increases for employers who choose fully funded plans.

In fact, one study says employers lose more in productivity than they pay for insurance premiums. For example:

Chronic Condition Direct & Indirect Costs
Heart disease and stroke About one in every six U.S. healthcare dollars is spent on cardiovascular disease. By 2030, annual direct medical costs could reach $818 billion, lost productivity costs could exceed $275 billion.
Hypertension/high blood pressure One in three adult Americans have high blood pressure, costing $46 million in health care services, medications and missed days of work
Diabetes In 2012, the medical costs related to diabetes totaled $245 billion, including $176 billion in direct medical costs and $69 billion in reduced productivity.
Asthma One in 13 people have asthma, and their medical expenses total $56 billion nationally, or about $3,300 per patient each year.



Many of the diseases that ruin our health and decimate our pocketbooks are linked to lifestyle choices, including.

  • Health Affairs reports that obese adults spend 42 percent more on healthcare costs than those with a healthy weight.
  • Sedentary lifestyles. In “The Price We Pay for Sitting Too Much,” The Wall Street Journal reported that inactive behaviors, including sitting for extended periods of time, increases our risk for dozens of chronic conditions.
  • Bad habits. Cigarette smoking is linked to 480,000 deaths annually and heavy drinking is linked to a dozen diseases, according to Web MD.
  • The typical American eats only one to two fruits and vegetables each day. And nine out of ten adults have too much sodium every day, which is closely linked to blood pressure and heart disease.

Using targeted approaches

The Robert Wood Johnson Foundation reports that people with chronic conditions use 75 percent of hospital days, office visits, home health care and prescription drugs. So it’s no surprise that insurance carriers are laser-focused on reducing their impact.

Recently, RAND Health surveyed 70 health plans to assess chronic care management programs and their effectiveness. RAND noted that the workplace, family members and the community can improve results by becoming part of the solution.

Among other findings:

  • Insurer’s biggest challenges are engaging members and coordinating with providers.
  • Incentives have a good ROI. About half of plans offer incentives, ranging from gift cards to lower premiums, to encourage member participating in programs.
  • “Big data” and predictive modeling help insurers identify risk and prioritize interventions.
  • Technology is part of the solution: Insurers are using remote monitoring, telemedicine and smartphone apps to engage their members.
  • Patient-centric approaches are being embraced. This holistic approach addresses patient needs and fills gaps across multiple conditions.

Payers expect that effective programs will eventually result in more competitive products, which is good news for employers.

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